Leeuw v First National Bank (516/2008) [2009] ZASCA 161; [2010] 2 All SA 329 (SCA) ; 2010 (3) SA 410 (SCA) (30 November 2009)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2009
>>
[2009] ZASCA 161
|

|

Leeuw v First National Bank (516/2008) [2009] ZASCA 161; [2010] 2 All SA 329 (SCA) ; 2010 (3) SA 410 (SCA) (30 November 2009)

Links to summary

THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case number: 516/2008
In the matter between:
TSHIDISO ISAAC LEEUW APPELLANT
and
FIRST NATIONAL BANK
RESPONDENT
Neutral citation:
Leeuw v First
National Bank
(516/2008)
[2009] ZASCA 161
(30
November 2009)
CORAM: Streicher, Heher, Snyders, Malan JJA and
Leach AJA
HEARD: 13 November 2009
DELIVERED: 30 November 2009
SUMMARY
: Estoppel –
negligent misrepresentation
ORDER
On appeal from
: The
Bloemfontein High Court (Beckley and Van Zyl JJ, sitting as court of
appeal).
Order:
The appeal is dismissed with costs.
JUDGMENT
SNYDERS JA: (Streicher, Heher, Malan JJA and Leach AJA
concurring)
[1] The respondent sued its customer, the appellant, in
the Thaba’ Nchu Magistrate’s Court for the recovery of an amount
of
R48 000 withdrawn from the appellant’s account with the
respondent after the deposit of a cheque in the amount of R48 598.69
into that account and before it was discovered that the signatures on
the cheque were forged. The appellant not only defended the
claim,
but instituted a counterclaim for the amount of R89 000. A cheque for
R89 000 was deposited into the same account, but the
respondent
reversed the credit in the appellant’s account upon discovering
that the signatures on the cheque were forged. The
decision by the
magistrate to dismiss the respondent’s claim and to grant the
appellant’s counterclaim, both with costs, was
appealed by the
respondent to the Bloemfontein High Court. The appeal was upheld and
the respondent was awarded its claim of R48
000 with interest and
costs, whereas an order for absolution from the instance was made on
the appellant’s counterclaim. It is
with the leave of the court
below that the matter is on appeal.
[2] The appellant persisted in this court with an
argument that the respondent’s initial notice of appeal was fatally
defective
as it did not comply with Magistrates’ courts rule
51(7)(b) which requires an appellant to state ‘the grounds of
appeal, specifying
the findings of fact or rulings of law appealed
against’. The rule is peremptory and non-compliance has been held
to render the
notice invalid.
1
The object of rule 51(7) is to enable the magistrate to frame his
reasons for judgment under rule 51(8) and, insofar as this had
not
already been done, to inform the respondent of the case he has to
meet and to notify the appeal court of the points to be raised.
2
In 1987 the Uniform rules of the high court were amended to provide,
for the first time, for the delivery, prior to the hearing,
of ‘a
concise and succinct statement of the main points. . . which [a
party] intends to argue on appeal’ – so-called heads
of
argument.
3
It can be said that since then, the object of the notice of appeal to
inform the respondent and the court was also achieved by
the heads of
argument, and it has almost become the rule that a full judgment is
given after a trial in the magistrates’ courts
which is rarely
added to in terms of rule 51(8), as also occurred in this case.
[3] The grounds in the notice of appeal that are
attacked by the appellant relate only to the counterclaim. It was
contended that
the magistrate should have found that both cheques
were forged, that the respondent was entitled to reverse the credit
entries
in the appellant’s account after it was discovered that the
cheques were forged and that the respondent’s witnesses, especially

Motaung, gave credible evidence which had to be preferred to that of
the appellant. These points, though not a model of eloquence,
clarity
and compliance, set out the only point in the appeal on the
counterclaim, namely that if Motaung’s evidence was accepted,
the
trial court should have concluded that there was no misrepresentation
by the respondent in relation to the R89 000 cheque.
This simple
point reflected the entire appeal on the counterclaim and achieved
the objects of rule 51(7) in the circumstances.
4
[4] The court a quo decided the matter on an acceptance
of Motaung’s evidence, as the notice urged it to do, and reversed
the
magistrate’s decision in this regard. It does not appear from
the judgment that the representative of the respondent had any
difficulty dealing with the relevant issue on appeal. On the
contrary, the court below had the impression that the point relating

to the notice of appeal had not been pursued and did not refer to it
in its judgment. Only after judgment and in response to a
letter from
the appellant’s attorneys, did it respond by furnishing additional
reasons pertaining to the point and concluded
that the grounds of
appeal were not too general or too vague.
[5] In this court it is not required that grounds of
appeal be stated in the notice of appeal.
5
The nature of the proceedings is such that this court is entitled to
make findings in relation to ‘any matter flowing fairly
from the
record’.
6
The parties in their written and oral arguments have dealt with all
the issues relevant to the appeal and the appellant has not
pointed
to anything that has been overlooked. The point, apart from being
bad, has long lost its significance.
[6] Many of the facts in this matter are common cause.
The appellant, the proprietor of a liquor outlet, the Love and
Happiness
Tavern, sold liquor to Thabo Mofokeng. The latter tendered
payment by way of a cheque in the amount of R48 598.69 drawn by
General
Food Industries Limited on the respondent in favour of
Mofokeng, or bearer. The appellant accepted the cheque as payment for
the
liquor bought and on 14 May 1999 deposited it into his bank
account with the respondent. The circumstances that lead to the
appellant
accepting the cheque as payment are in dispute and I shall
revert to that later. On 17 May 1999 the respondent allowed the
appellant
to utilise R48 000 of the proceeds of this cheque in order
to pay for liquor bought for his business. On 21 May 1999 the
appellant
again sold liquor to Mofokeng, this time for R89 000 and
again accepted a cheque in that amount, made out as before, in
payment.
This cheque was also deposited into the same account. On 24
May 1999 the respondent was notified by General Food Industries
Limited
that each of the two signatures on the cheques was forged.
The respondent immediately reversed the credits in the appellant’s

account brought about by the deposit of the two cheques and passed
debits in the same amounts. Because the respondent utilised
an amount
of R48 000 from the account before the debits were passed, the
respondent instituted action to recover that amount.
[7] The respondent’s claim was based on the
condictio
indebiti
. It alleged that the appellant was
enriched at the expense of the respondent in the amount of R48 000.
The appellant denied that
the
condictio
indebiti
was available to the respondent as a
bank, denied that he was enriched and pleaded that the respondent was
estopped from relying
on the forgery of the cheque. In support of the
defence of estoppel he pleaded that prior to the appellant accepting
the cheque
as payment for liquor supplied, the respondent represented
to him that the cheque was good for the money, and the appellant
relied
on the correctness of this representation when he decided to
accept the cheque as payment for the liquor sold to Mofokeng. In his

counterclaim the appellant pleaded that the respondent negligently
represented that the cheque of R89 000 was good for the money
before
he accepted it as payment for the liquor bought by Mofokeng; he
relied on this alleged misrepresentation and supplied liquor
to
Mofokeng for that value and consequently suffered damages.
[8] The magistrate accepted that the
condictio
indebiti
was ‘not available’ to a bank
and found that the respondent, in any event, failed to prove the
facts founding the
condictio indebiti
that it relied upon. On appeal the court below, the appellant and the
respondent again accepted that the
condictio
indebiti
was not the respondent’s ‘proper
cause of action’. The respondent argued in the court below that the
condictio sine causa
was the appropriate remedy. The court below found that although that
was not pleaded, its requirements were fully canvassed during
the
trial, the particulars of claim clearly based the respondent’s
claim on enrichment and the evidence required to prove the
one would
have sufficed to prove the other. These findings and an absence of
prejudice to the appellant, led the court below to
conclude that the
respondent should not fail for having pleaded the ‘incorrect
condictio
’.
[9] In this court the question whether the respondent’s
appropriate remedy is the
condictio indebiti
or the
condictio sine causa
is no longer alive as the appellant’s counsel conceded, rightly in
my view, that if the appellant is to fail on his defence of
estoppel,
the respondent was entitled to judgment in the amount of R48 000.
[10] However, to avoid future confusion it needs to be
stated that there is no principle that the
condictio
indebiti
is not available to a bank. In
ABSA
Bank Ltd v De Klerk
1999 (1) SA 861
(W), on
similar facts, it was held, in my view correctly, that the
condictio
indebiti
was the appropriate remedy for the
bank to have relied upon.
7
In
Saambou Bank Ltd v Essa
1993 (4) SA 62
(N) a thorough comparative analysis was made of facts
that would give rise to a bank being entitled to rely on the
condictio indebiti
as
opposed to the
condictio sine causa
.
It was held that if a bank believed it was obliged to pay ‘on
demand any withdrawal sought by [its customer] up to the amount
of
the credit standing in his account’ the
condictio
indebiti
was the appropriate remedy.
B
& H Engineering v First National Bank of SA Ltd
[1994] ZASCA 152
;
1995 (2) SA 279
(A), mentioned by the court below as if it
entertained another view, dealt with the different scenario of a bank
paying the amount
of a cheque to a payee not realising that the
cheque had been countermanded. There was no question in
B
& H
of the bank performing vis-à-vis
the payee. Hence the
condictio indebiti
did not arise.
[11] The only issue to be decided in relation to the
respondent’s R48 000 claim is whether the appellant proved his
defence of
estoppel.
8
Estoppel presupposes a representation made by words or conduct
relating to a certain factual position.
9
[12] According to the evidence of the appellant and Mr
Abram Motaung, a clerk employed by the respondent at the enquiries
desk,
the appellant approached him during May 1999 with the cheque of
R48 598.69. Motaung testified that the appellant:
‘
came to [him] with a cheque
and asked [him] if the cheque was good. [He] then had to check if the
cheque was not post-dated and
if the amounts correspond with figures.
[He] then checked in the computer if there was not stop payment on
the cheque. [He] confirmed
that the cheque was ok. [He] was not asked
to check if there were funds in the account. [He] did not check if
the signatures on
the cheque corresponded’.
Far from this evidence being disputed by the appellant
several features of his evidence support this version. He says that
when
Motaung came back with the cheque he said ‘the cheque was
genuine and [the appellant] could deposit the cheque’. This answer

indicates that Motaung was verifying that the cheque was, on the face
of it, acceptable for deposit. This was no different from
what
Motaung had done for the appellant numerous times before. The
appellant, on his own version, visited the Thaba’ Nchu branch
of
the respondent three to four times a week, depending on the state of
his business. He knew Motaung well. He also testified that
as he was
‘not learned’, whenever he made a deposit of cheques at the bank,
he would ask for assistance at the enquiries desk
with the completion
of the deposit slip before he went to the tellers to make the
deposit. In relation to the cheque for R48 598.69
Motaung did the
same thing he was requested to do by the appellant numerous times
before – to see whether the cheque was acceptable
for deposit and
to complete the deposit slip and send the appellant to the tellers.
[13] In view of the appellant’s self proclaimed habit
to ask Motaung to complete the deposit slips relating to cheque
deposits
made by him, it was for the appellant to show that his
request on this occasion was different from those on other occasions
in
that he required a guarantee that the cheque was as good as cash.
[14] The appellant said, rather obliquely, that Mofokeng
was with him when he explained to Motaung that Mofokeng wanted to buy
liquor
from him and offered the cheque in payment. He wanted to be
sure that he ‘was not going to lose money’. He wanted the
respondent
to give him the assurance that the cheque was as good as
cash and consequently that there was no risk for him in delivering
liquor
to Mofokeng. When Motaung was cross-examined he said he could
not remember whether the appellant told him why he wanted to know

that the cheque was good. If Motaung was aware of the presence of
Mofokeng and the reasons for this, he would have had a better
idea of
what it was that the appellant wanted assurances on. Despite his
lapse of memory it was not put to Motaung that Mofokeng,
the
purchaser and payee, was present and that the request concerning the
cheque was aimed at obtaining assurances for the purposes
of the sale
transaction between them. When the appellant was cross-examined about
the failure by his attorney to put this evidence
to Motaung, he was
unsure whether he told his attorney about it. In view of the failure
to explore this aspect during Motaung’s
evidence, it cannot be
concluded that the appellant’s request in relation to the R48
598.69 cheque was any different from his
previous requests.
[15] As far as the respondent is concerned it never
furnished the appellant with a guarantee that the cheque would be
paid. This
is supported by Motaung’s evidence that the appellant
telephoned him two to three days after the cheque was deposited and
told
him that he was busy buying liquor from a supplier and needed to
make payment of an amount of R48 000. He wanted to draw against
the
cheque that had been deposited by way of a shoppa card which
apparently operates like a debit card. The appellant denied that
he
ever made such a phonecall or had such a conversation with Motaung.
Motaung’s evidence is corroborated by the appellant’s
bank
statement that reflects that on 17 May 1999, three days after the
cheque was deposited, his shoppa card was loaded with the
amount of
R48 000, the exact amount that the appellant wanted to make his
purchase for. Upon receiving this phonecall Motaung went
to the
manager of the respondent to obtain authorisation for the withdrawal
of funds before the cheque was cleared. This authorisation
was given.
If the cheque was guaranteed earlier there was no need for the
appellant to have made this telephonic request or for
Motaung to have
sought this authorisation from the manager.
[16] The further question is whether the facts would
have made a reasonable person in the position of the appellant
believe that
the respondent was guaranteeing the funds represented by
the cheque.
10
The appellant’s own evidence shows why the answer has to be in the
negative. If it was a matter of the respondent issuing a guarantee,

there was no understandable basis why the funds would not have been
available straight away and why the appellant – on his own
version
- would have been told that it would take seven days for the funds to
be available. Likewise there would have been no need
for the
appellant to have phoned to make the arrangement that the money be
available for his purchase of stock before the expiry
of the seven
day period.
[17] Counsel’s contention that the appellant was under
the impression that the funds would, as a mere formality, take seven
days
to become available cannot be sustained. When the appellant was
told about the seven day clearing period he was not enquiring about

the availability of the funds, but, according to him, whether the
cheque was as good as cash. If the funds were guaranteed there
and
then there was no conceivable basis on which it would have taken time
for the funds to become available.
[18] The court below was correct in concluding that the
defence of estoppel was not proven.
[19] The appellant’s claim for R89 000 is based on
similar allegations, that Motaung made the same representation to
him. Motaung
denied that he was approached by the appellant with the
R89 000 cheque. His denial is supported by the fact that the deposit
slip
for the cheque was not completed by him and does not bear his
signature as in the case of the cheque for R48 598.69. It was common

cause that Motaung had a colleague, Motlhatlhedi, whom the appellant
knew as well as Motaung. Motaung suggested that it could have
been
Motlhatlhedi who assisted the appellant with the R89 000 cheque.
[20] Counsel for the appellant argued that the
respondent had a duty to call Motlhatlhedi as a witness to meet the
allegation that
the respondent made a representation to the appellant
in relation to the R89 000 cheque and argued that its failure to do
so warrants
the adverse inference that the misrepresentation alleged
by the appellant was made. This submission not only fails in logic,
but
also in law. Such an inference does not follow of necessity, but
is dependant on the circumstances of the case.
11
The allegation the respondent had to meet was that Motaung made the
alleged representation in relation to the R89 000 cheque. He
was
called as a witness and denied the allegation. Nothing in the
appellant’s case obliged the respondent to meet a case that
was not
pleaded by calling witnesses that were not alleged to have had
anything to do with the alleged representation and were
therefore
irrelevant. In addition, before an adverse inference is to be drawn
against a party for not calling a relevant witness,
it would have had
to be shown that the witness was available to be called.
12
Although Motaung, still employed by the respondent at the time of his
evidence, referred to Motlhatlhedi as his ‘former colleague’,
the
question whether Motlhatlhedi was available to give evidence was
never explored during the trial.
[21] The court below was correct in concluding that the
appellant did not prove his counterclaim at the trial and in granting
an
order of absolution.
[22] The appeal is dismissed with costs.
__________________________
S SNYDERS
Judge of Appeal
Appearances
:
For the Appellant: N W Phalatsi
Instructed by: N W Phalatsi Attorneys & Partners,
Bloemfontein
For the Respondent: Adv. J P Daffue SC
Instructed by: Steyn Meyer Attorneys, Bloemfontein
1
Himunchol v Moharom
1947 (4) SA 778
(N) at 780;
Tzouras
v SA Wimpy (Pty) Ltd
1978 (3) SA 204
(W) at 205E-F.
2
Kilian v Geregsbode, Uitenhage
1980 (1) SA 808
(A) at 815C-D.
3
Regulations R2164, GG10958, 2 October 1987.
4
Gaffoor v Mvelase
1938 NPD 429
at 431.
5
SCA r
ule 7(3): ‘Every notice of appeal and
cross-appeal shall – (a) state what part of the judgment or order
is appealed against;
(b) state the particular respect in which the
variation of the judgment or order is sought; and (c) be accompanied
by a certified
copy of the order (if any) granting leave to appeal
or to cross-appeal.’
6
Thompson
v South African Broadcasting Corporation
[2000] ZASCA 76
;
2001
(3) SA 746
(SCA) para 7: ‘The Court is entitled to base its
judgment and to make findings in relation to any matter flowing
fairly from
the record, the judgment, the heads of argument or the
oral argument itself.’
7
At 864H-I.
8
ABSA Bank Ltd v I W Blumberg & Wilkinson
[1997] ZASCA 15
;
1997 (3) SA 669
(SCA) at 677G-H.
9
Road Accident Fund v Mothupi
2000 (4) SA 38
(SCA) at paras 27 and 29.
10
Aris Enterprises
(Finance) (Pty) Ltd v Protea Assurance Co Ltd
1981 (3) SA 274
(A) at 292E-F.
11
Webranchek v L K Jacobs & Co Ltd
1948
(4) SA 671
(A);
Munster Estates (Pty)
Ltd v Killarney Hills (Pty) Ltd
1979
(1) SA 621
(A) at 624.
12
Elgin Fireclays Limited v Webb
1947 (4) SA 744
(A) at 750;
R
v Phiri
1958 (3) SA 161
(A) at 164H-165A.